Help! €90,000 cash from house sale, whats the best way to raise €30,000 to buy again?

johnny1982

Hi all,

I'm a newbie on here so go easy! I recently split from my partner and the house we jointly owned is now sold leaving me with a cash sum of €90,000. A good position, but the type of house I want to buy is going for around €120/130,000 and I was wondering what the best option is to raise the extra capital needed? I was out of work for 18 months but in the last 6 months have registered as self employed. It looks as though I'll be making in the region of €25/28,000 in the first year. Someone told me this doesn't matter as you need to be self employed with p60s for at least 3 years for the banks to entertain you. Truth or lies? Would the credit union look more favourably on me? If so, would I have to have been a member before now or will they lend if I walk in with a big sum?

I'm anxious to buy somewhere soon as prices are starting to rise again - don't want to wait for a p60 as it mightn't make a difference anyway and prices will be higher.

my friend

johnny1982 wrote: »

Hi all,

I'm a newbie on here so go easy! I recently split from my partner and the house we jointly owned is now sold leaving me with a cash sum of €90,000. A good position, but the type of house I want to buy is going for around €120/130,000 and I was wondering what the best option is to raise the extra capital needed? I was out of work for 18 months but in the last 6 months have registered as self employed. It looks as though I'll be making in the region of €25/28,000 in the first year. Someone told me this doesn't matter as you need to be self employed with p60s for at least 3 years for the banks to entertain you. Truth or lies? Would the credit union look more favourably on me? If so, would I have to have been a member before now or will they lend if I walk in with a big sum?

I'm anxious to buy somewhere soon as prices are starting to rise again - don't want to wait for a p60 as it mightn't make a difference anyway and prices will be higher.

If you had taken your €90000 on April 1st last and invested in Netflix stock NFLX that €90,000 would as of 5 minutes ago be worth €123,000

Just sayin'

jimmii

I applied for a mortgage early on as self-employed too it probably varies by bank but I found that the 3 years trading didn't matter it was the amount of profit that they were looking for really. €60k profit over the last three years was the bench mark they mentioned but if you had been trading 1 year with 60k profit over that time would have been enough or two years with €30k each year etc so if you do 28 this year and 32 next then that would meet the requirement but I guess the house may well cost a fair bit more by then!

handlemaster

my friend wrote: »

If you had taken your €90000 on April 1st last and invested in Netflix stock NFLX that €90,000 would as of 5 minutes ago be worth €123,000

Just sayin'

yiu always here of the potential gains. truth is you need to know alot about companies to invest in them the common man just isnt interested in effort

Sleepy

I'd talk to your Bank OP. Assuming you left aside 10k of your deposit to cover expenses and any work needed to a property, you'd have two thirds of the purchase price of an 120k house (conservative estimate since expenses shouldn't come near 10k unless work is desperately needed).

A 20 year mortgage for 40k would have a monthly re-payment of under €500 per month and your 25k is realistic, you'd have an after-tax income of approx €1,646 (tbh, the level of mortgage you'd need could probably be covered on social welfare short-term if needs must), and due to such a low LTV ratio (under 33%) the bank shouldn't be facing the possibility of negative equity in the event you were to default.

If you have any savings record at all, I'd have thought you'd be a good bet tbh.

johnnyskeleton

jimmii wrote: »

I applied for a mortgage early on as self-employed too it probably varies by bank but I found that the 3 years trading didn't matter it was the amount of profit that they were looking for really. €60k profit over the last three years was the bench mark they mentioned but if you had been trading 1 year with 60k profit over that time would have been enough or two years with €30k each year etc so if you do 28 this year and 32 next then that would meet the requirement but I guess the house may well cost a fair bit more by then!

By profit do you mean income? Which bank was this with and when was it? Because having had recent experience of drawing down a mortgage with BOI as a self emplpyed person was an absolute nightmare.

Also, surely it depends on how much you want to drawn down?

The_Conductor

The LTV ratio is only a remarkably low 25%.
I'd be inclined to apply straight away- at very least you'll get a feel of what is on lender's minds. As it stands the ratio is such a low level- that aside from income factors, there is no particular reason that a lender wouldn't bite your hand.

I'd also suggest exploring the personal loan route- offering to have a lien put on the property (aka- there would be a charge on the property)- instead of a straight forward mortgage. Over a 5 year term- even at a higher interest rate- it might prove achievable.

Sit down with a few lenders (or an independent broker) and go through your finances with them. The large lumpsum you're starting with- is a starting point that most people don't have- and will work massively in your favour (independently of all other factors).

jimmii

johnnyskeleton wrote: »

By profit do you mean income? Which bank was this with and when was it? Because having had recent experience of drawing down a mortgage with BOI as a self emplpyed person was an absolute nightmare.

Also, surely it depends on how much you want to drawn down?

No its profit that counts income is irrelevant as it doesn't show your ability to repay. It was about 6 months ago with AIB. They were very open about the process and gave us a lot of info of what we needed to so in the future to get approved.

The 60k/3years was needed to get any mortgage with them our rent at the time was €900 a month which we were comfortably paying and were only looking for 40k-50k as we already had a lump sum in the bank and just needed to top it up the repayments would obvioualy be a lot lower than the rent but without the 60k profit they weren't able to do anything.

my friend

my friend wrote: »

If you had taken your €90000 on April 1st last and invested in Netflix stock NFLX that €90,000 would as of 5 minutes ago be worth €123,000

Just sayin'

to address the neigh sayers with my posted suggestion

as of 5 minutes ago...

If you had taken your €90000 on April 1st last (2015) and invested in Netflix stock NFLX that €90,000 would as of 5 minutes ago be worth €166,443

If you had taken your €90,000 on 28/04/2015 (the date I posted the above quote) you would now have €122,233

loyatemu

except that he's not looking for investment advice and only a maniac would put all their cash into one stock.

Desmonddoyle

my friend wrote: »

to address the neigh sayers with my posted suggestion

as of 5 minutes ago...

If you had taken your €90000 on April 1st last (2015) and invested in Netflix stock NFLX that €90,000 would as of 5 minutes ago be worth €166,443

If you had taken your €90,000 on 28/04/2015 (the date I posted the above quote) you would now have €122,233

By the time he wants to release it, it could be worth €45,000. I would also take a quick look at the pretty significant broker commissions and fees first.

Have a quick look at the Chinese market at the moment - the market opened up for the Mr. Middleclass and his few bob. The stock market was flooded with IPO's, returns were only going one way, everyone bails in, headfirst with their savings. There are a lot of very, very sorry Chinese people over the last few weeks.

You would have been pimping Anglo stock eight years ago... last year it was worth X, now its worth this, I put this in now and it will be worth double that next year- house bought, bish bang bong, jobs a goodun.

OP - It would be an incredibly stupid thing to throw your life's worth into one stock.

athtrasna

This is the accommodation and property forum and not an appropriate place to discuss investments in stocks and shares.
Mod

fret_wimp2

Save a good amount of your wages on a regular basis?

if it was easy to make large piles of money, everyone would have large piles of money.
And Stuff like houses, cars and junk we fill them with would be even more expensive.